SomPack: If You Can't Beat Them, Join Them? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of SomPack: If You Can't Beat Them, Join Them?
This case considers attempts by a Turkish manufacturer of cosmetics packaging to trade off quality for cost, in order to compete with the influx of low-cost products from China. It describes the challenges faced by SomPack management in their effort to survive in the face of low-cost Chinese competition as well as the credit crisis. The company had grown because of its focus on quality and customer relations, but had to slash costs first in response to foreign competition and then again due to the global credit crisis. The case discusses many facets of the company's strategy: company efforts at automation to reduce labour costs in conjunction with their efforts to reduce product quality for parts that were to have automated assembly; use of cheaper raw material that required specialized equipment; use of cheaper costs in conjunction with their efforts to reduce product quality for parts that were to have automated assembly; use of cheaper raw material that required specialized equipment; use of cheaper machines that were not acceptable to customers who required high-quality manufacturing; implementation issues with a lower-cost ERP system; and attempts at outsourcing certain components. Decisions to reduce the quality of either processes or products must be made with great care: even though they are meant to be short-term survival measures, they can create significant short-term disruptions apart from potential long-term problems, such as making the company less attractive as a supplier to customers who may still prefer quality and service over cost.
Swot Analysis of "SomPack: If You Can't Beat Them, Join Them?" written by Sema Dube, Manu Dube includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cheaper Quality facing as an external strategic factors. Some of the topics covered in SomPack: If You Can't Beat Them, Join Them? case study are - Strategic Management Strategies, Financial management, Globalization, IT, Manufacturing, Marketing, Product development, Strategic planning and Sales & Marketing.
Some of the macro environment factors that can be used to understand the SomPack: If You Can't Beat Them, Join Them? casestudy better are - – supply chains are disrupted by pandemic , increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of SomPack: If You Can't Beat Them, Join Them?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SomPack: If You Can't Beat Them, Join Them? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cheaper Quality, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cheaper Quality operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of SomPack: If You Can't Beat Them, Join Them? can be done for the following purposes –
1. Strategic planning using facts provided in SomPack: If You Can't Beat Them, Join Them? case study
2. Improving business portfolio management of Cheaper Quality
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cheaper Quality
Strengths SomPack: If You Can't Beat Them, Join Them? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cheaper Quality in SomPack: If You Can't Beat Them, Join Them? Harvard Business Review case study are -
Highly skilled collaborators
– Cheaper Quality has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in SomPack: If You Can't Beat Them, Join Them? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Cheaper Quality has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cheaper Quality has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Cheaper Quality has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cheaper Quality to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Cheaper Quality is one of the leading recruiters in the industry. Managers in the SomPack: If You Can't Beat Them, Join Them? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Cheaper Quality
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cheaper Quality does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Cheaper Quality is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Cheaper Quality is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SomPack: If You Can't Beat Them, Join Them? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Cheaper Quality is one of the most innovative firm in sector. Manager in SomPack: If You Can't Beat Them, Join Them? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Cheaper Quality has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study SomPack: If You Can't Beat Them, Join Them? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Cheaper Quality are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Training and development
– Cheaper Quality has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in SomPack: If You Can't Beat Them, Join Them? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Cheaper Quality digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cheaper Quality has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Cheaper Quality is present in almost all the verticals within the industry. This has provided firm in SomPack: If You Can't Beat Them, Join Them? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses SomPack: If You Can't Beat Them, Join Them? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SomPack: If You Can't Beat Them, Join Them? are -
Workers concerns about automation
– As automation is fast increasing in the segment, Cheaper Quality needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Cheaper Quality products
– To increase the profitability and margins on the products, Cheaper Quality needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study SomPack: If You Can't Beat Them, Join Them? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case SomPack: If You Can't Beat Them, Join Them? can leverage the sales team experience to cultivate customer relationships as Cheaper Quality is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study SomPack: If You Can't Beat Them, Join Them?, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Need for greater diversity
– Cheaper Quality has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the SomPack: If You Can't Beat Them, Join Them? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cheaper Quality has relatively successful track record of launching new products.
High cash cycle compare to competitors
Cheaper Quality has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Cheaper Quality is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Cheaper Quality needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cheaper Quality to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study SomPack: If You Can't Beat Them, Join Them?, is just above the industry average. Cheaper Quality needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Products dominated business model
– Even though Cheaper Quality has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - SomPack: If You Can't Beat Them, Join Them? should strive to include more intangible value offerings along with its core products and services.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cheaper Quality supply chain. Even after few cautionary changes mentioned in the HBR case study - SomPack: If You Can't Beat Them, Join Them?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cheaper Quality vulnerable to further global disruptions in South East Asia.
Opportunities SomPack: If You Can't Beat Them, Join Them? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study SomPack: If You Can't Beat Them, Join Them? are -
Leveraging digital technologies
– Cheaper Quality can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Cheaper Quality can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cheaper Quality is facing challenges because of the dominance of functional experts in the organization. SomPack: If You Can't Beat Them, Join Them? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Cheaper Quality can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cheaper Quality can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Cheaper Quality can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Cheaper Quality has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study SomPack: If You Can't Beat Them, Join Them? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cheaper Quality to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cheaper Quality can use these opportunities to build new business models that can help the communities that Cheaper Quality operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Manufacturing automation
– Cheaper Quality can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Cheaper Quality has opened avenues for new revenue streams for the organization in the industry. This can help Cheaper Quality to build a more holistic ecosystem as suggested in the SomPack: If You Can't Beat Them, Join Them? case study. Cheaper Quality can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cheaper Quality in the consumer business. Now Cheaper Quality can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cheaper Quality can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cheaper Quality to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Cheaper Quality to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cheaper Quality can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats SomPack: If You Can't Beat Them, Join Them? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SomPack: If You Can't Beat Them, Join Them? are -
Shortening product life cycle
– it is one of the major threat that Cheaper Quality is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Cheaper Quality will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cheaper Quality can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study SomPack: If You Can't Beat Them, Join Them? .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Cheaper Quality needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Regulatory challenges
– Cheaper Quality needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SomPack: If You Can't Beat Them, Join Them?, Cheaper Quality may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Cheaper Quality needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Cheaper Quality can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Stagnating economy with rate increase
– Cheaper Quality can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Cheaper Quality
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Cheaper Quality.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cheaper Quality with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Cheaper Quality high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of SomPack: If You Can't Beat Them, Join Them? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study SomPack: If You Can't Beat Them, Join Them? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study SomPack: If You Can't Beat Them, Join Them? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study SomPack: If You Can't Beat Them, Join Them? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of SomPack: If You Can't Beat Them, Join Them? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Cheaper Quality needs to make to build a sustainable competitive advantage.
